Engineering & Energy
2002 MICHAEL BAKER CORPORATION
Investor Relations Presentation
Ninth Annual
Emerald Groundhog Day
Investment Forum
February 5, 2002
1
2002
Safe Harbor
Engineering & Energy
This presentation will contain information related to
events which may occur in the future. These
forward-looking statements may include future
business trends, revenue and earnings forecasts,
and acquisition and corporate finance activity.
These statements are subject to market, regulatory,
operating and other risks and uncertainties and, as a
result, actual results may vary. Such forwardlooking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation
Reform Act of 1995.
2
2002

Summary / Highlights
Focused on Two Segments




Engineering & Energy
Engineering and Energy
Leader in Professional Services

Oil & Gas Production O&M

Transportation and Civil Infrastructure Engineering
Positioned to Accelerate Margin Growth, Led
by Energy Segment
Currently Valued at 5x EBITDA
3
2002
Decade of Performance
$400
Engineering & Energy
Dollars in Millions
$390
$349
$150
Continuing Business Revenue
$121
$283
$300
$248
$199
$200
$157
$127
$100
$41
$86
$136
$189
$179
$72
$45
$42
$43
$115
$210
$69
$228
$55
$43
$240
$203
$39
$150
$127
$205
$80
$179
$162
$165
1996
1997
$134
$93
$0
1990
1991
1992
1993
1994
1995
Engineering
1998
1999
2000
2001(E)
Energy
4
2002

Core Energy Service Offerings
Oil & Gas





Engineering & Energy
Operations & Maintenance
Operations Engineering
Competency-Based Training
Supply Chain Management
Power




Operations & Maintenance
New Equipment Installation
Outage Planning/Overhauls
Engineering / Start-up Assistance
5
2002

Differentiation of Services
Engineering & Energy
Energy



OPCOSM
Integrated Services and Solutions for Global
O&G Upstream Production Operations
Competency-Based Training and
Nationalization Programs
6
2002
OPCO
SM
Engineering & Energy
OPCO Integrated Decision-making
in Production Operations
Idea
Explore
Construct
Management
Develop
Produce
Monetize
Operations
Network Growth
Maintenance
OPCO
Supply Chain
Management
HS&E
Production
Operations
Functions and
Critical Decisions
Training &
Development
Human
Resources
7
2002
Energy Growth Drivers
Engineering & Energy
Fixed Fee Income
Annual Performance Bonus
Sharing Cost Savings
Baker
VALUE CREATION
SHARED SAVINGS
LEVERAGED
ECONOMIES of SCALE
OPCO
SM
Client
Reduced Operating Costs
Increased Revenues
Increased Efficiency
8
$0
Jan-02
Nov-01
Price Driver
Sep-01
Jul-01
May-01
Mar-01
Jan-01
Nov-00
Sep-00
Jul-00
May-00
Mar-00
Jan-00
Nov-99
Sep-99
Jul-99
May-99
Mar-99
Jan-99
Nov-98
Sep-98
Jul-98
May-98
Mar-98
Jan-98
$/bbl
2002
Engineering & Energy
Historical Oil Prices (WTI)
$40
$35
$30
$25
$20
$15
$10
$5
Data Source: www.eia.doe.gov
9
2002
OPCO Diffusion Curve
Early
Adopters
Early
Majority
Late
Majority
Engineering & Energy
Laggards
10
2002
Our OPCO Potential Market
Engineering & Energy
11
2002
Our OPCO-Served Market
Engineering & Energy
12
2002


Deepwater Opportunities
Engineering & Energy
Largest Supplier of
Manpower to Deepwater
GOM
Ops Engineering
Support to New Facilities
13
2002


eOPS
Engineering & Energy
Fully-Integrated, Operations and Maintenance System
for Upstream Energy Industry
Alliance:



Baker - Content
SAIC - Technology, Telecom and Knowledge Management
Deloitte - Planning, Strategy and Analysis

Global Market - $160 Billion

Benefits




Shortened Cycle Time
Improved Operating Performance
Lower Cost of Operation
Greater Asset Return
14
2002 Core Engineering Service Offerings

Transportation Engineering Services





Engineering & Energy
Highways
Bridges (Structures)
Program Management
Asset Management
Civil Infrastructure
Services




Cold Region Pipelines
DoD / Federal Markets
Water/Waste Water
Asset Management
15
2002
Growth Drivers
Engineering & Energy
Transportation: TEA-21
3rd
9th
8th
1st
4th
11th
7th
12th
35th
10th
29th
23rd
6th
2nd
5th
22nd
Ranking TEA-21 Funded States
Baker Office
16
Source: Projected TEA-21 Apportionments 1998-2003, ENR (08/00)
Growth Drivers
Engineering & Energy
TEA-21/AIR-21
$ in billions
2002
$45
$40
$35
$30
$25
$20
$15
$10
$5
$0
Total Federal Authorizations
$36.7
$23.9
2000
$37.8
$38.7
$26.5
$24.7
2001
TEA-21
2002 (E)
$39.8
$28.4
2003 (E)
AIR-21
Source: Federal Highway Administrations and FAA, U.S. Department of Transportation
17
2002



Engineering Highlights - 2001
$290mm in New Work Added
Won $130mm in Open-End Contracts with
Department of Defense
Selected as General Engineering Consultant
for Hampton Roads Third Crossing


Engineering & Energy
$4.5 Billion Total Project Cost
Successful Entry into Texas Market
18
2002

Competitive Barriers to Entry
Engineering & Energy
Energy
Customer Relationships
 Content and Information Delivery Systems
 Implementation/Delivery Capability
 OPCO Network


Engineering
Alignment of Services to Meet Customer
Needs
 Long-Term Relationships

19
2002

Key Customer Relationships
Energy

Engineering & Energy
Engineering
20
2002 Acquisition Growth Opportunities

Engineering & Energy
Geographic and Capacity Expansion
Energy Opportunities
 Engineering Opportunities


Additional Capabilities

Energy



Training Program Development
Maintenance Management Systems
Engineering


Water/Wastewater
Asset Management
21
2002
Total Revenues
Engineering & Energy
$600
$521.3
Dollars in Millions
$500
$506.0
$390.7
$348.7
$400
$300
$390.0
$281.9
$247.0
$200
$100
$0
1998
1999
Total Reported Revenues
2000
Engineering
2001 (E)
Energy
22
2002
Revenues
$150
Engineering & Energy
Q3/Q3 Total Reported/Engineering/Energy Revenues
Dollars in Millions
$129.8
$125
$75
$98.4 $98.4
$92.4
$100
$89.7
$37.8
$69.0
$31.8
$17.5
$50
$57.9
$51.5
$25
$60.6
$0
1999
Total Reported Revenues
2000
Engineering
2001
Energy
23
2002
Operating Performance
Engineering & Energy
(in Thousands of $)
TOTAL CONTRACT REVENUES
Total Reported
Less Non-Core
ENERGY
ENGINEERING
Total Core
‘98
‘99
‘00
$521,271
274,249
$506,012
224,132
$390,710
42,018
68,607
178,414
80,158
201,722
120,708
227,984
247,021
281,880
348,692
TOTAL OPERATING INCOME (Pre-Corp. O/H and I/C Ins. Premiums)
7,075
(511)
17,543
Total Reported
1.4%
-.1%
4.5%
%
ENERGY
%
ENGINEERING
%
Total Core
%
5,297
7.7%
13,796
7.7%
6.8%
13,356
6.6%
9,314
7.7%
16,783
7.4%
$19,093
7.7%
$18,827
6.7%
$26,097
7.5%
Adjusted for $1 Million Non-Recurring Charge
5,471
24
2002
Operating Performance (Q3/Q3)
Engineering & Energy
(in Thousands of $)
TOTAL CONTRACT REVENUES
Total Reported
Less Non-Core
ENERGY
ENGINEERING
Total Core
‘99
‘00
‘01
$129,790
60,810
$92,351
2,634
$98,387
-
17,466
51,514
31,809
57,908
37,766
60,621
68,980
89,717
98,387
TOTAL OPERATING INCOME (Pre-Corp. O/H and I/C Ins. Premiums)
(2,938)
5,503
8,801
Total Reported
(2.3%)
6.0%
8.9%
%
ENERGY
%
ENGINEERING
%
Total Core
%
1,220
563
7.0%
2,481
4.8%
2,313
7.3%
3,865
6.7%
4,121
10.9%
5,132
8.5%
$3,701
5.4%
$6,178
6.9%
$9,253
9.4%
25
2002
Cash Flow
Engineering & Energy
(in millions of $)
Net Income
Depreciation & Amortization
Other
Cash from Operations
Capital Expenditures
Acquisition/Investments
Share Repurchase
Proceeds from Sale of Assets/Stock Options
NET Borrowings (Repayments)
NET Increase (Decrease) in Cash
‘98
‘99
‘00
$(2.4)
5.0
(4.0)
(1.4)
$(8.2)
7.4
1.9
1.1
$5.4
7.1
(0.1)
12.4
(10.6)
(.8)
(.8)
2.7
$(10.9)
(5.3)
(4.9)
7.8
$(1.3)
(2.9)
(9.0)
15.0
(10.1)
$5.4
26
2002
Balance Sheet
Engineering & Energy
(in millions of $)
‘98
‘99
‘00
$5.0
82.7
22.4
$3.7
77.4
20.8
$9.1
9.0
68.0
16.1
17.5
7.5
16.8
151.9
17.1
14.6
15.6
149.2
10.1
10.8
10.2
133.3
LIABILITIES
Current Prt LTD
Trade A/P
Accrued Other
.8
43.4
51.7
3.5
28.9
57.1
2.2
25.7
55.0
Long Term Debt
3.1
14.9
0.1
52.9
$151.9
44.8
$149.2
50.3
$133.3
ASSETS
Cash
Short-Term Investment
A/R
Cost in Excess of Billing
PPE
Intangibles
Other
Owners’ Equity
27
2002
EPS Growth
Reported
EPS
Pro Forma EPS
Core Operating Income
Less Corporate Overhead
Operating Income
Engineering & Energy
‘98
‘99
‘00
$(.30)
$(1.00)
$.65
$19,093
(8,744)
10,349
$17,827
(7,664)
10,163
$26,097
(7,715)
18,382
(4,864)
5,485
(4,777)
5,386
(9,375)
9,007
$.67
$.66
$1.09
Provision for Income Taxes
(47% Rate for 1998 & 1999 and
51% Rate for 2000)
Pro Forma EPS
2001 Estimate: $1.25 - $1.30
28
Stock Performance (12 mos.)
2002
$16.00
$15.20
$14.00
$14.00
$15.00
$13.38
$13.85
Closing Share Price
Engineering & Energy
$12.00
$13.60
$12.70
$12.26
$11.55
$10.00
$10.00
$8.93
$8.00
$8.25
$8.30
01/01
02/01
$6.00
$4.00
$2.00
$0.00
03/01
04/01
05/01
06/01
07/01
08/01
09/01
10/01
11/01
12/01
01/02
29
2002
Ownership
Engineering & Energy
Holders
Shares
Baker ESOP
3,420,821
Lord, Abbett & Co.
689,303
Goldman Sachs Asset Management
566,700
Dimensional Fund Advisors Inc.
477,714
Corbyn Investment Management
227,137
Tontine Management, L.L.C.
210,600
Munder Capital Management
171,900
Paradigm Capital Management
154,400
Emerald Advisers
87,100
30
2002

Conclusion
Engineering & Energy
Leader in:
Oil & Gas Production O&M
 Transportation and Civil Infrastructure
Engineering





Energy Market Conditions Catalyst for
Significant Growth
Investment in Transportation
Infrastructure Providing Substantial
Opportunity
Debt-free, Leverageable Balance
Sheet
Currently Valued at 5x EBITDA
31
Engineering & Energy
2001 MICHAEL BAKER CORPORATION
Investor Relations Presentation
32